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Currency board, dollarisation or flexible exchange rates for emerging economies? Reflections on Argentina

Aschinger, Gerhard

In: Intereconomics, 2002, vol. 37, no. 2, p. 110-115

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    Title
    • Currency board, dollarisation or flexible exchange rates for emerging economies? Reflections on Argentina
    Author
    • Aschinger, Gerhard. University of Fribourg, Switzerland
    Document Type
    • Postprint
    Language
    • English
    Published in
    • Intereconomics, 2002, vol. 37, no. 2, p. 110-115. Springer-Verlag
    Other Version
    Classification
    • Economics
    OAI-PMH Identifier
    • oai:doc.rero.ch:310868
    Summary
    Since the 1990s many emerging countries have adopted a fixed exchange-rate peg vis-à-vis a reserve currency in order to cope with economic imbalances such as buoyant inflation, high unemployment or staggering economic growth. However, after a period of economic stabilisation and prosperity, overheating effects showed up in several countries that were often coupled with difficulties in the banking and/or the real estate sector. Sticking with a fixed peg, the likelihood of a currency crisis increased. The case of Argentina shows that even with a currency board it is difficult to restore confidence if a crisis has already been developing for several years. This article presents an economic analysis of the Argentina crisis